UCPB Leasing and Finance Corporation v. Heirs of Leporgo
REITERATIONFacts
The Antecedents: UCPB Leasing and Finance Corporation (ULFC) was the registered owner of a trailer truck leased to Subic Bay Movers, Inc. (SBMI). While the trailer truck was driven by Miguelito Almazan, it collided with the car of Florencio Leporgo, Sr., causing Leporgo's death. The heirs of Leporgo filed a complaint for damages against ULFC and Almazan. Procedural History: The Regional Trial Court (RTC) initially dismissed the case for improper service of summons on ULFC. However, after an alias summons was served and ULFC filed an Answer Ad Cautelam and actively participated in the proceedings, the RTC found ULFC and Almazan jointly and severally liable. The Court of Appeals (CA) affirmed the RTC's decision, holding that there was substantial compliance with the rules on summons and that ULFC, as the registered owner, was liable despite the lease agreement. The Petition: ULFC assailed the CA's decision, arguing that the RTC never acquired jurisdiction over it due to improper service of summons. ULFC also contested the computation of damages and reiterated its exemption from liability under R.A. 8556.
Issue(s)
Whether the RTC acquired jurisdiction over ULFC. Whether ULFC, as the registered owner, may be held liable for damages. Whether the monetary awards were properly computed.
Ruling
The Supreme Court ruled that ULFC voluntarily submitted to the jurisdiction of the RTC by filing an Answer Ad Cautelam and actively participating in the proceedings. The Court affirmed ULFC's solidary liability as the registered owner, holding that the unregistered lease agreement did not exempt it from liability to third parties. The Court modified the computation of loss of earning capacity and reduced the award for moral damages.
Ratio Decidendi
On the issue of jurisdiction: The Court held that ULFC voluntarily submitted to the jurisdiction of the RTC when it filed its Answer Ad Cautelam. While the initial service of summons was defective, ULFC's subsequent active participation in the proceedings, including filing pleadings and raising other defenses besides lack of jurisdiction, constituted a voluntary appearance equivalent to service of summons under Section 20, Rule 14 of the Rules of Court. The Court emphasized that the purpose of summons is to acquire jurisdiction and afford the defendant an opportunity to be heard, which ULFC had. On ULFC's liability as registered owner: The Court reiterated that under Section 5 of R.A. 4136, compulsory registration of motor vehicles is required to bind third parties. The lease agreement between ULFC and SBMI, not being registered with the Land Transportation Office, did not exempt ULFC from liability for damages caused by the trailer truck. The Court cited PCI Leasing and Finance, Inc. v. UCPB General Insurance Co., Inc. to emphasize that as to third persons, ULFC remained the owner despite the lease. The Court clarified that R.A. 8556 does not supersede R.A. 4136 regarding compulsory registration. On the computation of damages: The Court found the RTC's computation of loss of earning capacity erroneous and applied the prevailing formula: Net earning capacity = [2/3 (80 - age of the deceased)] x [Gross Annual Income - Living Expenses (50% of GAI)]. Applying this, the Court recomputed the loss of earning capacity to P2,710,319.99. The Court also found the award of P1,000,000.00 for moral damages to be exorbitant and reduced it to P100,000.00, while affirming the awards for actual damages, civil indemnity, and exemplary damages. The Court also modified the attorney's fees to P50,000.00.
Main Doctrine
A lease agreement for a motor vehicle, if not registered with the Land Transportation Office, does not bind third parties, and the registered owner remains liable for damages caused by the vehicle. Furthermore, voluntary appearance in court, even with a reservation of questioning jurisdiction, is deemed equivalent to service of summons.